INVEST Act passes in the House with momentum toward the Senate
INVEST Act passes in the House with momentum toward the Senate
Author:
The Carta Policy Team
|
Read time:
8 minutes
Published date:
12 December 2025
The House passes the bipartisan INVEST Act to expand access to private markets, as the SEC shifts leadership and regulatory tone, and the White House pushes to preempt state AI laws through executive action.
Topline
- INVEST Act clears the House with strong bipartisan vote
- SEC Commissioner Crenshaw to depart SEC with words of caution for private markets
- White House EO aims to preempt state AI patchwork
- Quick hits
INVEST Act clears the House with strong bipartisan vote
The House of Representatives passed the INVEST Act this week with a decisive 302-123 vote. 87 Democrats joined Republicans to advance this legislative package that will broaden access to capital for more founders and fund managers across the country.
Why it matters to the innovation economy…
More capital. The INVEST Act will promote broader access to capital by:
- Enabling venture capital fund managers to invest more capital in other venture capital funds and portfolio company investments acquired through secondary transactions.
- Expanding the size and investor limits for qualifying venture capital funds, helping emerging managers assemble competitive funds.
- Raising the private fund exemption threshold and indexing it to inflation, ensuring smaller fund managers can continue to support small business capital formation.
- Making it easier for startups and small businesses to connect with investors by clarifying that demo days do not violate fundraising rules.
More investment opportunities. The INVEST Act will enable more individuals to benefit from private markets by:
- Modernizing the accredited investor standard by adding new on-ramps based on education, experience, or examinations.
- Enabling retail investors to get exposure to private funds through SEC-registered funds.
- Permitting 403(b) retirement plans to invest in collective investment trusts (CITs).
More liquidity. The INVEST Act increases liquidity and makes it easier for companies to IPO, lowering barriers and reducing costs.
Engagement matters: Carta and our Innovator Alliance partners have been working to educate, shape, and engage the broader innovation community for consensus.
SEC Commissioner Crenshaw to depart SEC with words of caution for private markets
SEC Commissioner Caroline Crenshaw is set to depart the agency. Here are the highlights of her concerns:
- Growth of private markets: Crenshaw advocates for new disclosures on private issuers.
- Retail access to private markets: Urges stronger guardrails for democratizing access.
- Data gaps and systemic risk monitoring: Calls for more comprehensive data collection.
- AI governance: Urges a robust regulatory framework for AI capabilities.
Bigger picture: The growing politicization of independent agencies raises stakes for regulators and market participants.
White House issues EO aimed at preempting state AI patchwork
President Trump signed an executive order aimed at creating a federal approach to AI policy. Key directives include:
- Litigation mandate: Establishment of an AI Litigation Task Force.
- Evaluation of onerous state laws: Identification of overly burdensome state laws.
- Federal reporting and disclosure standard: FCC to determine a federal standard for AI.
- Legislative recommendations: Preparation of a national AI framework for Congress.
Why it matters: 38 states enacted AI-related measures, creating a fragmented legal landscape.
Quick hits
- Crypto corner: SEC grants DTC approval for tokenization pilot allowing tokenized securities to plug directly into existing market infrastructure.
- OCC permits banks to act as intermediaries in crypto-asset trades, enhancing regulatory clarity.
- Final NDAA includes outbound investment restrictions, preventing U.S. investments in certain sectors of the Chinese economy.
- SEC chief accountant explores rule changes to modernize oversight of audit inspections.
- FSOC pivots its focus, indicating a shift toward deregulation.